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MNI BRIEF: Tight Jobs Market To Underscore RBA Concerns

MNI (PERTH)
MNI (Perth)

The Reserve Bank of Australia's concerns about wages growth will have been reinforced by August labour force data showing the jobs market remains tight.

While a slightly-lower-than expected 33,500 jobs were added and the unemployment rate rose to 3.5% from 3.4% in July, participation rose to 66.6%, just shy of June's record high.

The RBA may find some comfort from a potential rise in labour supply as hours worked recovers over coming months. The Australian Bureau of Statistics noted that around 760,000 people work reduced hours in August due to Covid and other illness, around double the usual level at the end of winter. This will help in terms of labour supply.

The RBA expects unemployment to rise over coming years as rate hikes bite. The Statement on Monetary Policy forecasts unemployment to steadily rise to 4% by the end of 2024. The Australian dollar moved slightly higher after the data was released (See FOREX: Antipodean Data Dominates As G10 FX Hold Ranges).

Governor Philip Lowe last week warned of "briskly" rising labour costs in some pockets of the economy. (See MNI: RBA'S Lowe Says Case for Slower Hikes Becoming Stronger).

Robert covers RBA and RBNZ policy and the economy for MNI in Australia.
Central Bank NewsPolicy NewsHomepageAPACAustraliaBriefStoryRBARegion
Robert covers RBA and RBNZ policy and the economy for MNI in Australia.
Central Bank NewsPolicy NewsHomepageAPACAustraliaBriefStoryRBARegion

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